LONDON (Reuters) - A severe H1N1 flu pandemic could cost the UK economy 72 billion pounds ($121 billion), British scientists said on Friday, but advised against closing schools even if the current mild pandemic takes a turn for the worse.

Researchers from the London School of Economics, London School of Hygiene and Tropical Medicine and Edinburgh University said a "high fatality" pandemic would cut gross domestic product by 3.3 to 4.3 percent, or 55.5 billion to 72.3 billion pounds.

The study, published in the British Medical Journal, said several factors could exacerbate that impact -- the extra strain on an economy already in recession, the closure of schools and the absence of large numbers of people from work.

"School closures and...absenteeism, whether imposed by government or the result of fear of infection in the population, could greatly increase the economic impact of a pandemic while providing questionable health gains," the researchers wrote.

They said such measures should only be taken "in exceptional circumstances",

Thousands of children were told to stay away from their schools to try to stop the spread of H1N1 when it first came to Britain in April, but the government has since advised against school closures.

British health authorities have twice revised down their worst-case scenarios for H1N1 flu, bringing original estimates that as many as 65,000 could die from H1N1 down to a prediction of around 1,000 deaths -- way below the average annual toll of 4,000 to 8,000 deaths from seasonal winter flu.

To date, H1N1 -- also known as swine flu -- has killed 187 people in Britain and experts estimate that around 10 to 12 percent of the population has been infected with it.

H1N1 flu was declared a pandemic in June and has killed more than 7,000 people worldwide, according to latest data from the European Centre for Disease Prevention and Control.

The British researchers used a computer model to estimate the potential impact of pandemic flu on the UK economy. Using 2004 data, they replicated various disease scenarios, vaccination programmes, school closures, and "prophylactic absenteeism" -- where people avoid contact and stay off work.

As well as predicting the overall cost impact in worst and better case scenarios, they also found that having sufficient stocks of effective vaccine would play a major role in mitigating the cost of a pandemic.

Britain began a vaccination programme on Oct. 21 for high-risk hospital patients, front-line healthcare workers, children in seasonal flu risk groups, pregnant women and people with compromised immune systems.

The study said the cost of vaccinations was likely to be less than the economic savings gained even in the mildest of pandemics.